What Really Affects Home Values?

Home equity is classically defined as the difference between the appraised value of the home you have, and the amount of mortgage you have left to pay off for that house. There are, however, some things that can change your home’s value. Some of these aspects you can’t control, but quite a few of them are up to you.

Obviously, the amount you continue to pay on the principle, simply adds to your equity. But there’s also the appraisal amount, which should, typically, increase over time – assuming the stability of your neighborhood doesn’t decline during that time (one of those parts of the equation you have little control over.)

You can also make improvements to your home to increase value, and thus, equity, as long as those improvements are seen as actual enhancements, as opposed to simple cosmetic changes. Not that cosmetic changes don’t help sell homes; a fresh coat of paint does wonders for homes “resting” on the market.

Additionally, structures around you can change. This can influence the value of your home for appraisers. If local infrastructure changes, or private commerce structures (think better shopping areas) change for the better around your area, this can add to a valuation.

When schools get better ratings in your area, this can also change your home’s value for the better.

Maintenance is also key. Keeping up on repairs is critical to maintaining the value of your home. Without consistent upkeep, a home’s value can depreciate rapidly – especially if you are trying to sell that home. Suddenly it becomes a “fixer-upper” as opposed to someone’s dream home.

Look at the age of your appliances. If you still have avocado green appliances, you might want to consider updating. Older appliances are seen as a liability, just as an older, less efficient HCVAC system is viewed as a problem for future home owners.

Check for any leaks. Even small, long-term drips can wreak havoc on a valuation. A slight leak in a wall, or ceiling, can quickly turn into a mold problem - with a huge cost to remedy. Imagine the valuation that comes back with that written on a report.

What does the roof look like? Just like dated bathrooms, your roof can be very telling. If you have a fifteen year roof, and you’re in your fourteenth year, you should probably consider a replacement. Lifetime roofing materials are available, with transferable warranties. This can be a major point of value for a potential homeowner.

Like a web page, your home is quickly evaluated by what it looks like when someone first sees it. That said, the outside becomes very important to what potential buyers think about the valuation you’ve placed on your home. Look for those things that not only can be seen from the street, but features that can be seen when coming up the walk. Look for any signs of peeling or blistered paint; unruly hedges or bare spots. Finally, take a good look at your windows for any repairs, repainting or replacement.

Seeing what needs to be done can sometimes be difficult. We can become acclimated to our surroundings, and overlook little updates that add value to our homes. One solution to this is to take pictures of all sides of the exterior and every interior space, and then look them over for a fresh perspective of your home. See if you don’t find more than a few things that might need to be repaired or updated. Remember, a well maintained home gets better offers.